OTC Weekly Trading Insights (03/06/2025)

Top Interest of the WeekLast Sunday, US President Donald Trump made waves in the cryptocurrency market by sharing a significant message on his social media platform, Truth Social. His post suggested that Ripple ($XRP), Solana ($SOL), and Cardano ($ADA) would be included in a strategic crypto reserve, a move that many interpreted as a strong endorsement of these digital assets. This announcement ignited a massive buying frenzy among investors, leading to a dramatic surge in cryptocurrency prices. Bitcoin, the leading cryptocurrency, saw its value skyrocket by over $10,000, jumping from $85,000 to an impressive $95,000. Meanwhile, Ethereum (ETH) and Solana (SOL) also experienced substantial gains, with both assets recording double-digit percentage gains.The excitement surrounding Trump's announcement had a particularly pronounced effect on Ripple ($XRP) and Cardano ($ADA), both of which are ranked among the top 20 cryptocurrencies by market capitalization. Ripple's value surged by an astonishing 34%, while Cardano's price skyrocketed by 72% within a single day. Additionally, the Official Trump ($TRUMP) token, which is tied to Donald Trump himself, also benefited from the market surge, gaining 28% in value as investors reacted positively to the news.However, the euphoria in the cryptocurrency sector was short-lived. As the Asian markets opened on Monday, a wave of profit-taking swept through the market, leading to a significant retracement in prices. Bitcoin, Ethereum, and Solana all saw their values decline, with Ethereum's price notably falling below the critical $2,000 threshold on Tuesday. The shift in market sentiment quickly turned bearish, influenced by broader economic concerns, particularly the impending implementation of 25% tariffs on imports from Canada and Mexico. These tariffs had been postponed since February, but their imminent introduction added to investor anxiety.In addition to the tariffs on North American imports, a new 10% tariff on Chinese goods was set to take effect, bringing the total tariff burden on Chinese imports to 20%. This escalation in trade tensions prompted Canada, Mexico, and China to respond with reciprocal tariffs on US products, further exacerbating the situation. Notably, Canada even issued a warning about potentially cutting off electricity supplies to US states, highlighting the escalating nature of the trade conflict.Overall MarketSource: TradingViewThe above chart is the BTC price in the daily candle chart at the log scale.In our last update, our analysis indicated minimal support between the $76k and $89k levels, as Bitcoin's price rapidly ascended through this range in November 2024. Additionally, the evolving tariffs between the US and its trading partners, such as Canada, Mexico, the European Union, and China, created a risk-averse investment climate. We noted a rotation in the market from small- to medium-cap altcoins to established blue-chip cryptocurrencies to enhance risk profiles.Over the weekend, the excitement in the crypto market, sparked by posts from US President Trump, led to significant short liquidations, driving Bitcoin's price up to $95k, while Solana ($SOL) soared past $177 within hours. Unexpectedly, Trump mentioned that Ripple, Solana, and Cardano would be part of the strategic crypto reserve, which was initially intended to include only Bitcoin. In a follow-up post, he added that Bitcoin and Ethereum would also be part of this reserve initiative.The substantial short liquidations quickly propelled Bitcoin and other cryptocurrency prices upward, with many cryptocurrencies experiencing double-digit increases. The crypto community perceived Trump's announcement as a positive move towards establishing a national crypto reserve, a concept he frequently discussed during his presidential campaign.However, many investors in the crypto industry have voiced doubts regarding the practicality of Trump's proposal and the potential inclusion of altcoins in the reserve program. A primary concern is that adding more altcoins could complicate the approval process in Congress. Additionally, ongoing tariff issues have increased risk-averse sentiment throughout the broader market. As a result, our desk observed considerable profit-taking as the Asian market opened on Monday.As shown in the above chart, it indicates that both the BTC price and the RSI faced rejection from the descending trendlines, despite the market being energized by excitement and significant short liquidations. Currently, the RSI for BTC is making another attempt. If it successfully breaks through the trendline with confirmation, we anticipate the BTC price to trade within the $95k-$104k range while awaiting further macro developments. Conversely, if it faces rejection again, we are inclined to see the BTC price decline further in search of additional support around the $76k level. Notably, the current price structure resembles that of last August, when BTC experienced a sharp drop due to escalating geopolitical tensions. After the BTC price capitulated to $49k, it took two months to consolidate before rising again. Should both the BTC price and its RSI be rejected, we expect a similar trajectory to unfold.Our team closely tracks potential catalysts that could drive BTC upward and breach the resistance trendline. This includes developments such as the Trump administration advancing the Bitcoin Reserve initiative, any state endorsing the State Bitcoin Reserve Plan, and potential monetary policy easing from central banks.Options MarketThe above chart is the at-the-money implied volatility curve of BTC options.Following the price fluctuations observed over the weekend, the options market is currently exhibiting elevated implied volatility on the front end. This heightened level of implied volatility can be attributed, in part, to the recent tariffs imposed by the United States and its trading partners, which have introduced additional layers of uncertainty into the market. As a result, traders are demanding a significant premium for the risks associated with short-term price movements, reflecting a cautious sentiment among market participants.In the medium term, the options market is pricing implied volatility for Bitcoin options in the mid-50% range, which indicates a relatively stable outlook. This flat profile suggests that traders do not foresee any abrupt or dramatic price movements in BTC in the next three to six months timeframe. Instead, the market appears to be anticipating that BTC will remain within a defined trading range, with limited volatility expected during this period. From this perspective, the options market leans towards the expectation that BTC will trade sideways rather than experiencing rapid upward or downward shifts. This sentiment may be influenced by a variety of factors, including macroeconomic conditions, regulatory developments, and market sentiment, all of which contribute to the overall perception of risk in the cryptocurrency space. As traders navigate this environment, the elevated implied volatility on the short end serves as a reminder of the inherent uncertainties that continue to shape the market landscape. Macro at a glance Last Thursday (25-02-27)US initial jobless claims have begun to increase, with last week's figure reported at 242,000, exceeding the anticipated 222,000.Last Friday (25-02-28)The unemployment rate in Germany held steady at 6.2% in February, unchanged from January.The US PCE Price Index for January has been released, showing results that align with market expectations. The year-over-year growth of the PCE Price Index was 2.5% in January, a decrease from the 2.6% reported in December. Meanwhile, the Core PCE Price Index experienced a yearly increase of 2.6%, down from 2.9% in the previous month. These figures remain above the Federal Reserve's 2% target, leading the market to anticipate the first rate cut by the Fed in June, with expected pauses in March and May.The Chicago PMI reported stronger-than-expected results, registering at 45.5 in February, surpassing the forecast of 40.5 and January's figure of 39.5.On Monday (25-03-03)The Eurozone is anticipating a monthly Consumer Price Index (CPI) growth rate of 0.5%, with an annualized rate of 2.4% for February, slightly exceeding the predicted 2.3%. In the same timeframe, the Core CPI recorded an annualized growth rate of 2.6%, marginally above the expected 2.5%.In the United States, the ISM Manufacturing Purchasing Managers' Index (PMI) registered at 50.3 in February, falling short of the anticipated 50.6 and lower than January's figure of 50.9. This data suggests a modest expansion in February, although it indicates a cooling trend. The ISM Manufacturing Prices index was reported at 62.4, significantly surpassing the forecast of 56.2 and the previous month's 54.9.The Atlanta Federal Reserve's GDPNow model has revised its estimate for annualized growth in the current quarter to a surprising -2.8% as of Monday, a decrease from the +2.3% projected last week. A month prior, the model indicated that growth for the January-March period was on track for nearly +4.0%.On Tuesday (25-03-04)The United States has implemented a 25% tariff on imports from Canada and Mexico, along with a 20% tariff on goods from China, effectively doubling the tariff on Chinese products from the previous month. In response, both Canada and Mexico have declared retaliatory tariffs on American exports. Additionally, China has announced plans to introduce new tariffs on various agricultural imports from the United States starting next week. This wave of tariffs has led to a risk-averse investment environment, resulting in the US stock market losing all gains made since the election, while Bitcoin is trading around the $85,000 mark.On Wednesday (25-03-05)The US ADP Nonfarm employment change recorded an increase of only 77,000 in February, falling short of the anticipated 141,000.The US S&P Global Services PMI stood at 51.0 in February, just below the expected 51.1.The ISM Non-Manufacturing PMI registered at 53.5, slightly exceeding the forecast of 52.5.Later this week, we will see ECB's interest rate decision on Thursday, where a 25 basis point rate cut is widely expected. US nonfarm payroll report for February is anticipated, projecting an increase of 156,000 jobs. The US unemployment rate is estimated to remain at 4.0%. Fed Chair Powell is scheduled to deliver a speech this Friday.Convert Portal Volume ChangeThe above table shows the volume change on our Convert Portal by zone. Last weekend, the market experienced volatility following US President Donald Trump's announcement regarding the establishment of a "strategic crypto reserve" that will encompass Bitcoin ($BTC), Ethereum ($ETH), Ripple ($XRP), Solana ($SOL), and Cardano ($ADA), shared via posts on Truth Social. This news led to significant price surges for the listed cryptocurrencies, resulting in a substantial liquidation of short positions. However, the market retraced the following day amid concerns over a potential trade conflict between the US and its trading partners.In the Payments sector, trading volume rose by 42.2%, with Bitcoin ($BTC) and Ripple ($XRP) being the primary drivers of this increase.In the Layer1/Layer2 sector, trading volume experienced a 37.8% uptick last week, largely fueled by the cryptocurrencies mentioned in Trump's announcement.Why trade OTC?  Binance offers our clients various ways to access OTC trading, including chat communication channels and the Binance OTC platform (https://www.binance.com/en/otc) for manual price quotations, Algo Orders, or automated price quotations via Binance Convert and Block Trade platform (https://www.binance.com/en/convert) and the Binance Convert OTC API. Email: [email protected] for more information.Join our Telegram (https://t.me/BinanceOTC) to stay up to date with the markets!